The Energy Community: Regional Ownership of an Integration Initiative in South East Europe

Citation:
Bozidar CEROVIC and Milica UVALIC (eds), Western Balkans' Accession to the European Union. Political and Economic Challenges, Belgrade, Faculty of Economics of the University of Belgrade, Publishing Centre, 2010, 313-342

This paper focuses on the process of establishment of a new Regional Electricity Market in South East Europe. This is an example of an intra-regional cooperation between the countries from the Western Balkans. In addition, the differences between this regional energy market and other Electricity Regional Initiatives in Europe up to date will be underlined, having in mind that the ultimate objective is that SEE REM shall be integrated into the internal energy market of the EU. So far, the regional initiatives covering the SEE countries in other fields have been characterized with a limited success due to the fact that most of these regional initiatives were initiated by external actors and a genuine will for cooperation between the SEE countries was missing in cases when an external incentive was lacking behind. Nevertheless, as it could be incurred from the existing successful REMs in other parts of Europe, the political will and dedication of the market players is essential for an effective integration of the national electricity markets. Even though the SEE REM was initiated as an idea of the EU and the Stability Pact, the development of the SEE REM in the framework of the Energy Community has been impressive in the short period of its existence. Despite the many remaining open issues before its effective functioning and integration with the other REMs in Europe, many steps and great reforms have been undertaken in electricity markets of the SEE countries at national but also at cross-border level. The clear enlargement perspective of the countries involved was the main incentive for reforms of the national electricity markets in SEE and for the establishment of the Energy Community. Therefore, this regional initiative is being transformed into regional cooperation seen more as an 'open regionalism' achieved from within the region and with regionally owned institutions and solutions for solving the regional problems. That is where the positive expectations for a success of the regional initiative between the SEE countries in the energy field, come from and that is why this article argues that the Energy Community is a positive example of a regional initiative for the SEE countries.